The 5% rule: when a pay gap triggers a joint pay assessment
By the Equaudit team · Updated · 3 min read
If you only remember one number from the EU Pay Transparency Directive, make it 5%. A gap of at least 5% between the average pay of women and men in any category of workers, that you cannot justify and have not corrected, obliges you to carry out a joint pay assessment together with workers' representatives. This article explains the mechanics and how to get ahead of it.
What the 5% measures
The threshold applies to each category of workers, meaning a group doing the same work or work of equal value, not to the company as a whole. For every category you compare the average pay of women with the average pay of men, using the same formula as the overall gap: (men − women) ÷ men × 100. See how to calculate the gender pay gap.
| Category | Men, avg hourly | Women, avg hourly | Gap | 5% or more? |
|---|---|---|---|---|
| Customer support | €20.00 | €18.60 | 7.0% | Yes, investigate |
| Warehouse | €17.50 | €17.20 | 1.7% | No |
| Software engineers | €38.00 | €39.00 | −2.6% | No (men earn less, but under 5%) |
The three conditions together
A joint pay assessment is not automatic as soon as a category reaches 5%. It applies when all of the following are true:
- Your pay gap report shows a gap of at least 5% in the average pay level between women and men in a category of workers.
- You have not justified the gap on the basis of objective, gender-neutral criteria.
- You have not remedied the gap within six months of the date of the report.
This design gives you a window. A gap that has a documented, objective explanation, such as different qualifications or seniority that is genuinely relevant to the job and applied without regard to gender, does not trigger the assessment. A gap you can fix within six months does not either.
What counts as a justification
The justification has to rest on objective, gender-neutral criteria, and you need to be able to show it. Factors that commonly come up include relevant experience, specific qualifications, geographic pay zones, performance criteria that are transparent and consistently applied, and market-driven pay for scarce skills. Each must be applied in a way that is not itself biased against one sex, and you should expect scrutiny when the same factor consistently benefits one group.
Write the reasoning down at the time of analysis. Do not construct it after a worker or representative challenges you.
What a joint pay assessment involves
You carry out the assessment together with workers' representatives. In essence you analyse the proportion of women and men in each category, compare pay levels and variable pay, identify differences, work out the reasons behind them, and agree measures to close unjustified gaps, then check that earlier measures worked. The output is a documented analysis and a plan, so the work is much easier if you already hold clean category definitions and pay data.
How to get ahead of it
- Run the numbers early. Trial your 2026 data well before the report is due so that you have time to act, rather than the six months after filing.
- Look at small categories with care. A category with a handful of people can show a large percentage gap because of one salary. Review it, document the reason and avoid over-reacting, but do not ignore it.
- Fix at the source. Review starting pay ranges and pay-progression criteria, since gaps usually begin at hiring and widen through uneven raises. See salary ranges in job ads.
- Keep an audit trail. Store the category definitions, the criteria and the decisions with dates.
Equaudit flags every category at or above 5% and marks small samples, so you can see where to investigate first. Free accounts show how many categories are flagged and Pro shows which ones.
Frequently asked questions
Is the 5% measured on the whole company?
No. It applies to each category of workers doing the same work or work of equal value. The company-wide gap is reported but does not by itself trigger the joint pay assessment.
Can I avoid a joint pay assessment by explaining the gap?
Yes, if the gap is justified by objective, gender-neutral criteria and you can demonstrate it. A gap that you correct within six months of the report also avoids the assessment.
Does a gap in favour of women count?
The directive speaks of a gap of at least 5% in average pay between women and men in a category. It is sensible to review gaps in either direction and to document the reasons.